Tuesday, February 12, 2013

Although
a small country, Moldova has been of interest to U.S. policymakers due to its
position between NATO and EU member Romania and strategic Ukraine. In
addition, some experts have expressed concern about Russian efforts to
extend its hegemony over Moldova through various methods, including a
troop presence, manipulation of Moldova’s relationship with its breakaway Transnistria
region, and energy supplies and other economic links. Moldova’s political and economic
weakness has made it a source of organized criminal activity of concern to U.S. policymakers,
including trafficking in persons.

Moldova is governed by the Alliance for European Integration, a center-right
coalition of three parties. Prime Minister Vlad Filat has said he is
focused on dismantling the country’s Communist legacy and building a state
ruled by law. However, conflicts with the Communist opposition and tensions
within the coalition appear to have slowed reform efforts. Moldova is Europe’s
poorest country, according to the World Bank. Remittances from Moldovans
working abroad amounted to 22% of the country’s Gross Domestic Product in
2010. The global financial crisis has had a negative impact on Moldova.
Moldova’s currency weakened and remittances dropped, as Moldovan emigrants
lost jobs in other hard-hit countries. Moldova’s GDP dropped by 7.3% in 2009,
rebounded by 6.9% in 2010 and 6.5% in 2011, only to stall in 2012.

As a self-declared neutral country, Moldova does not seek NATO membership, but
participates in NATO’s Partnership for Peace (PFP) program. Moldova is
currently negotiating an Association Agreement with the European Union
(EU), which provides for cooperation in a wide variety of spheres,
including a free trade agreement. Moldova hopes to become a candidate for EU membership,
although the EU is unlikely to accept Moldova in the foreseeable future, due to Moldova’s
poverty, the EU’s own internal challenges, and possibly also due to concerns
that it would set a precedent for the candidacy of other former Soviet
states, such as Ukraine.

The United States and Moldova have enjoyed good relations since the country’s
independence in 1991. In a visit to Moldova in 2011, Vice President Joseph
Biden outlined U.S. policy toward the country. Biden praised Moldova for
its commitment to reform and democratic values, including the holding of
free and fair elections. He called on Moldova to continue its efforts to create
a transparent legal system, to fight corruption, and to end human
trafficking. He said that the United States would continue to support a
settlement for Transnistria that preserves Moldova's sovereignty and
territorial integrity within its internationally recognized borders. He said
U.S. aid would help the Moldovan government create policies to spur
economic growth and attract foreign investment, train civil society to
become more effective advocates, and help improve Moldova's schools.

The 112th Congress addressed a longstanding
Moldovan concern by adopting legislation to grant the country Permanent
Normal Trade Relations with the United States (P.L. 112-208).

Date of Report: February 1, 2013
Number of Pages: 13Order Number: RS21981Price: $29.95

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